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KLIFF 2022 PROGRAMME BOOK

Digitalization And Fintech Could Unlock Growth Opportunities

The COVID-19 pandemic has demonstrated how the capacity of a company or a bank to shift its business online is critical for
its continuity. For Islamic banks and sukuk, higher digitalization and fintech collaboration could help strengthen their resilience
in more volatile environments and open new avenues for growth. The industry is slowly getting there, and digitalization is
now prominent among decisionmakers’ priorities. In the GCC, for example, banks shifted their activities to online platforms
during pandemic lockdowns with minimal impact. Offering digital banking services, issuing sukuk on a digital platform using
blockchain technology, and enhancing cyber security will be the three main factors for industry resilience.

However, the provision of adequate physical and nonphysical infrastructure and implementation of the necessary supervision
and regulatory framework will be prerequisites for fintech to act as a catalyst for the Islamic finance industry. That is why several
regulators and authorities in the GCC and elsewhere have launched incubators or specific regulatory sandboxes where fintech
companies can test innovations. A regulatory environment for digital sukuk and a monetary bridge between the physical and
digital worlds could help provide market access.

Related Research

- Indonesia’s Sukuk Program Affirmed At ‘BBB’ On Update Of Terms And Conditions, May 24, 2022
- Growing Belief In Southeast Asia’s US$290 Billion Islamic Banking Market, May 11, 2022
- ICDPS Sukuk Ltd.’s Trust Certificate Issuance Program Affirmed At ‘A-’ On Update Of Terms And Conditions, April 28, 2022
- Lower Global Liquidity And Increased Complexity Are Likely To Hold Back Sukuk Issuance In 2022, Jan 18, 2022
- Islamic Finance 2021-2022: Toward Sustainable Growth, May 3, 2021

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